It’s 2020: Why Doesn’t Texas Require Bars to Carry Liquor Liability Insurance?

By Jeffrey CarrDecember 17, 2019Reading Time: 6 minutes

In the last several sessions of the Texas Legislature, lawmakers have unsuccessfully tried to pass a law making liquor liability insurance mandatory for bars, restaurants, and alcohol retailers. Each time, that push did not succeed. Despite leading the nation in drunk driving fatalities and serious injuries, the lack of mandatory liquor liability insurance means that it's often the victims of drunk drivers who end up bearing the costs for a decision made by the drunks and a bar. An incident this past weekend may illustrate how inadequate current law is and how Texas has the equivalent of a liquor liability lottery that helps some victims, while leaving others out in the cold.

A Waco Drunk Driving Crash Turns a Young Woman's Life Upside Down

On Sunday, December 14, 2019, at around 2 a.m., an allegedly drunk driver struck a young woman crossing the street in Waco, TX. According to reports, Grace O'Heeron was in a crosswalk when alleged drunk driver Grabriela Estrada ran a red light and struck her. As a result of the crash, Ms. O'Heeron suffered numerous broken bones and head trauma. While the doctors expect Ms. O'Heeron to survive, such serious injuries are likely to mean a long recovery time, significant medical bills, and effects on Ms. O'Heeron's life that will last for months or years after an incident that wasn't even her fault.

A short time after she allegedly ran over Ms. O'Heeron, authorities were able to track down and arrest Ms. Estrada, who had fled the scene. Police charged Ms. Estrada with intoxication assault, which carries a sentence of between 2 and 10 years in prison, if a jury convicts her. While it's certainly just that Ms. Estrada will have to answer for her alleged crimes, what most people don't realize is that it's possible another party, who broke the law and contributed to Ms. O'Heeron's crash, will be far less likely to face justice for their actions. I'm referring to any bar that broke the law and served Ms. Estrada when she was already intoxicated.

Behind the Majority of Late Night Drunk Driving Crashes Is a Bar that Broke the Law

News reports rarely mention it, but 2 a.m. Sunday is the weekly Super Bowl for drunk driving injuries and fatalities in Texas. The number of people killed in drunk driver crashes between 1 a.m. and 3 a.m. Sunday morning is greater than all of the drunk driving fatalities and injuries that occur on Monday, Tuesday, Wednesday, and Thursday combined.

The most obvious reason that Sunday morning is so deadly is because Saturday night is the biggest drinking night of the typical week and 1-3 a.m. is the time when people generally leave bars to head home. However, under Texas law, this shouldn't really matter, because it's illegal to serve an intoxicated person. Why would the number of drunk drivers spike around last call if bars aren't breaking the law? The answer is obvious: Many bars will flout the law and continue to serve people, even when their patrons are already drunk.

Recognizing this problem (and with a big push from the Supreme Court of Texas), the legislature passed the Texas Dram Shop Act, which holds bars accountable for injuries or deaths that occur when a bar serves an obviously an intoxicated person.

Recognizing this problem (and with a big push from the Supreme Court of Texas), the legislature passed the Texas Dram Shop Act, which holds bars accountable for injuries or deaths that occur when a bar serves an obviously an intoxicated person. Put simply, if a bar serves an obviously intoxicated person, anyone injured by the drunk as a result has a right to bring a claim against the bar.

In cases where a person suffers catastrophic injuries that result in hundreds of thousands of dollars in medical bills, lost earning capacity, and even a life-altering brain injury, holding everyone accountable, the drunk driver and the bar alike, is the only way that victims don't end up having to bear the full costs of injuries that were not their fault.

This set-up works in theory, but it has one giant hole in it, many bar owners can skirt justice by simply shutting down the bar that broke the law, renaming it, and opening a "new" bar in the exact same location. Here's how that works.

How Do Some Bars Skirt Texas Dram Shop Law?

It usually shocks people to learn that in theory, while Texas law holds bars accountable for the injuries and deaths that result when their lawbreaking kills or injures someone, in practice, bars routinely skirt the law. To understand how, it's important to know a bit about how Texas licenses alcohol service.

There are two issues at play. The first is that Texas doesn't necessarily license a bar; rather, it issues a license to the bar's owner. If the owner has a license, then the bar is free to serve alcohol. This means that if Joe Smith has a valid liquor license, he's free to open Joe's Bar and serve alcohol. If Joe's Bar serves a drunk, who then goes out and kills someone as a result, the victims have the ability to sue Joe's Bar.

In this scenario, Joe Smith fights the lawsuit, loses, and a jury decides that Joe's Bar has to compensate the victim for their injuries. Rather than pay the victim, Joe decides that since the judgement is against Joe's Bar, he'll just shut down Joe's Bar and not pay it. However, since Joe still has his liquor license, he's free to file some paperwork, buy a new sign, and open up Smitty's Pub. He can even keep the same staff and often the same furniture. For all practical purposes, Joe's Bar doesn't exist anymore, so the victims get nothing, while Joe Smith still owns a bar that can break the law and kill someone else.

In fact, 2 out of 3 bars in Texas do not have valid liquor liability coverage to pay for injuries or deaths that result from careless alcohol service.

If you think this doesn't happen, you need look no further than the death of Davion Boswell in Lubbock last year. An alleged drunk driver, who was leaving a nearby club, struck Mr. Boswell, killing him. It turns out that the owner of that club had also owned another bar a few years before that was sanctioned by the TABC. The TABC allowed the owner to surrender his liquor license, shut down the bar, and then obtain a new license some time later. The guy opened up a new club and to no one's surprise, a few years later, that club may have also over-served someone who killed another person.

Another issue that victims encounter is that, even if the owner of the bar isn't looking for a slimy way to shirk their legal obligations, most bars simply lack the resources to pay for a catastrophic injury or wrongful death. In fact, 2 out of 3 bars in Texas do not have valid liquor liability insurance with sufficient coverage to pay for injuries or deaths that result from careless alcohol service. The simplest reason why they don't is that Texas doesn't require them to purchase any.

Over the years, the attorneys at Grossman Law Offices have seen numerous instances where a family lost a young child, or a breadwinner, or had to scramble to care for a brain-damaged loved one, but were unable to hold a bad bar accountable, simply because the bad bar was broke. You and I can't drive down the road without insurance (and rightly so), because of the potential harm we could cause others. These days it's next to impossible to rent an apartment in most parts of Texas without insurance, on the off chance you might injure someone or damage the rental property. At the same time, bars who contribute to hundreds of fatalities and thousands of serious injuries every year don't have to have insurance? What sense does that make?

It's Time for Texas to End the Injury Lottery and Mandate that Alcohol Providers Carry Liquor Liability Insurance

I don't want to paint too bleak a picture of dram shop law. The attorneys at Grossman Law Offices represent hundreds of victims in dram shop cases at any given time. Over the years, our attorneys have helped thousands of Texans hold bars accountable for serious injuries and deaths, which resulted from bars breaking the law.

In that time, those same attorneys witnessed countless instances where someone lost a loved one, or suffered a debilitating injury, but, because the bar who broke the law wasn't responsible enough to carry insurance and lacked the assets to pay for their illegal conduct, their victims ended up left out in the cold. These folks found themselves unable to pay their hospital bills, unable to work, and often turned to the government for help, because that was the only option left to them. In essence, a bar can be so irresponsible that the burden to clean up their mess falls not just on the victims, but also on each and every taxpayer who has to support them.

When a bar breaks the law, the victims like Grace O'Heeron shouldn't be left with a 1 in 3 chance that they might be able to get justice. This is particularly the case when the solution is as simple as the Texas Legislature requiring bars to carry liquor liability coverage. Such a law would ensure that victims of illegal alcohol service don't end up footing the cost of injuries for which they are not responsible. Likewise, it would prevent the unjust shifting the financial burden of these crashes from a lawbreaking bar to the taxpayer.

Texas lawmakers and the public have to make a choice. Drunk driving accidents not only kill and maim, but they leave tremendous financial devastation in their wake. As a community, we must decide who bears that cost. Should drunk drivers and lawbreaking bars pay it, or victims and the general public? The answer seems obvious to me.